Social Security Endures - New York Times
The New York Times

May 8, 2006
Editorial

Social Security Endures

Buried in the newly released 2006 annual report on Social Security, there is
good news on the program's long-term health. But don't expect to hear
President
Bush talking about it. His main comment on the new report is that the system
is "going broke." He apparently still wants people to believe that their
only
options are ending up with nothing from the government in old age or relying
on financial markets. That's a false choice and Americans recognized it as
such when they rejected his push last year for private accounts.

Projected "cost rates" in this year's report show smaller annual deficits in
Social Security than had previously been assumed, starting around
mid-century.
The 75-year projection ends in 2080 with a shortfall that is less than last
year's estimates by $57 billion, in today's dollars. That's important,
because
the smaller the deficit, the less drastic the reforms needed to keep the
program going strong.

The deficit is lower because government statisticians now assume that
American women will have two children, on average, versus an earlier
estimate of 1.95.
The happy result for Social Security is that more taxpayers make for a
healthier system. That is not to suggest that increased fertility is the key
to
strengthening Social Security. It obviously helps, as would more immigration
or stronger wage growth.

What the big impact of small adjustments shows is that Social Security is a
dynamic system, adaptable to the 21st century. Currently, it is able to pay
full benefits until 2040. Reforms that are enacted between now and then must
be structured to take advantage of shifts that work in the system's favor,
and to protect against those that don't. To that end, phasing in a modest
package of benefit cuts and tax increases over the next several decades is
the
best way to ensure that the system won't come up short a generation from
now.

Posted by Miriam V.